Capping Cleanup Costs is the Aim of Environmental Insurance in Use At Former Lompoc, Calif. Military Site, Says ECS.

Business Editors/Insurance & Real Estate Writers

EXTON, Pa.--(BUSINESS WIRE)--Jan. 7, 2002

To help contain the expense of cleanup activities at an unused army barrack, an environmental insurance program is providing an essential financial cushion and liability protection as part of an innovative fixed cost remediation agreement.

ECS, an XL Capital company and one of the nation's leading providers of environmental insurance, designed the program exclusively for ARCADIS G&M and its Guaranteed Fixed Price Remediation Program (GRiP).

ARCADIS G&M's GRiP is being implemented in the cleanup of the former U.S. Disciplinary Barracks (USDB), located just northwest of Lompoc, Calif. The 2,875-acre facility was used as a military detention center. When cleaned up, a portion of the site will be transferred to the U.S. Bureau of Prisons.

For one fixed price, ARCADIS' fixed price remediation program provides all investigation, remediation, and regulatory services that will be necessary for environmental cleanup of one particular contaminated site at the former military base.

ECS designed the GRiP insurance program to offer ARCARDIS protection against potential cleanup cost overruns and provide insurance coverage for first-party (on-site) and third-party (off-site) coverage for remediation expenses, bodily injury, property damage and legal defense expenses.

According to Bob Hallenbeck, senior vice president for ECS, "The potential for uncovering additional contamination or running up against other unanticipated complications could send environmental cleanup costs skyrocketing. That threat -- the threat of the `unknown' -- has often hindered companies from starting remediation or redevelopment projects.

"The advantages of using guaranteed fixed price remediation, especially in saving time and money, are growing more attractive to those businesses or public agencies faced with environmental cleanups," said Hallenbeck. "In these deals, environmental insurance serves as a `safety net' supporting the very existence of these guaranteed cleanup programs."

According to Hallenbeck, such insurance coverage offers assurance that funding will be there to keep the project moving along, even if unexpected costs arise as a result of the discovery of additional contamination, the spread of contamination, higher disposal costs or costs associated with changes in cleanup standards.

ECS has created numerous customized insurance programs for large-scale environmental remediation and redevelopment projects.

For instance, ECS has designed environmental insurance programs for the redevelopment activities occurring on many former military bases, such as the former Fort Devens; Massachusetts; Orlando Naval Training Center, Orlando, FL; Lowry Air Force Base, Denver, CO; Kelly Air Force Base, San Antonio, TX; the Naval Ship Yard, Philadelphia, PA; Fort Sheridan, Highland Park, IL and others.

ECS issues policies through Greenwich Insurance Company, Indian Harbor Insurance Company and XL Specialty Insurance Company.

ECS, an XL Capital company, is an underwriting manager providing integrated environmental risk management(R) solutions to business and industry worldwide. ECS meets the diverse needs of its customers through insurance, risk control and claims management. XL Capital Ltd, through its wholly owned subsidiaries, provides insurance and reinsurance coverages and financial products worldwide.

As of September 30, 2001, XL had consolidated assets of approximately $25.7 billion and consolidated shareholders' equity of approximately $4.8 billion. Additional information is available on the XL web site: www.xlcapital.com or www.ecsinc.com.

Please note that this press release describes insurance coverage that is subject to underwriting analysis and may not be available in all states. The above description is neither a complete description nor a complete list of all terms, conditions and exclusions, and only the provisions of a specific policy have legal effect. Certain terms used in the above description are defined in the policy. Please see the policy for a complete description of its scope and limitations of coverage.